Three tactics to prevent corporate fraud from crippling your small business

By Thursday, May 29, 2014 0 , Permalink

Fraudsters are the bane of private individuals and businesses large and small. The internet has provided tremendous opportunity for fraudsters looking to lie, cheat and steal their way into the wallets of honest people and enteprises across the UK. And sadly, there is no sign that we are winning the war.Fraudulent activity is on the rise, so it is now more important than ever that you learn just how to protect your small business from the activities of these unscrupulous undesirables.


It’s a sad indictment of our times that insider fraud is on the rise. If you can’t trust your own people, who exactly can you trust? Thankfully, there are a number of tools at your disposal which can be used to screen your high level appointments. A free company check is one of the services offered by rmonline. This service allows you to conduct a detailed background check on potential partners or directors, screening them for any unwelcome elements such as insolvencies or County Court Judgements (CCJs) before you confirm their appointment.


There are plenty of strategies you can employ to reduce your exposure to corporate fraud. Here are a few more…


Don’t employ just any Tom, Dick or Harry


Tom, Dick and Harry might all be lovely, but the more you know about your employees, the lower the risk of fraud. One of the risks of employing temporary or seasonal staff is the inevitable rise in the likelihood that you will become a victim of fraud. If you run a seasonal business or employ temporary staff, employing people you don’t know is unavoidable. However, you can combat these additional risks by carrying out a risk assessment into the potential weaknesses of your business and acting on the findings.


Keep an eye on your credit rating


It is often the case that the first a small business owner learns of fraud is via a financial irregularity such as a credit refusal. If you have a positive credit rating then any such financial irregularity should be viewed with suspicion, as this may be the tip of the fraudulent iceberg. Thankfully, by contacting a credit reference agency or free company check website, you will be able to see whether everything is exactly as it should be. If there are any inconsistencies, you can start to dig a little deeper.


Sweat the small stuff


We’d all love to have a laissez faire attitude to life and business, but occasionally you have to sweat the small stuff, whether you like it or not. Fraudulent employees start small. They will test the water by committing minor acts of fraud to see whether they are detected, before working their way up to more serious crimes. One of the most common areas of minor insider fraud involves the company expenses account, so keep a keen eye on any unsolicited expenses. Detection at this stage will often be enough to nip fraudulent activity in the bud.


If you run an SME then we’d love to hear your thoughts on corporate fraud. What tactics do you employ to prevent it? Have you experienced insider fraud in the past? How were the fraudulent activities exposed? Please leave your comments below. 

Paying close attention to all your business accounting activities will enable you to catch any discrepancies before a molehill turns into a mountain.         


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